Energy Efficiency Standard for Social Housing: peer review

9 Conclusions

This document presents a thorough analysis of the EESSH consultation document, highlighting a number of areas for consideration. Elements have been validated throughout and refinements made or proposed to enhance the final standard. A number of key points stand out and these are drawn together in this concluding section.

9.1 Baseline Assumptions

Overall, the consultation makes the correct assumptions based on the data that is available. There are limits in relation to how far the 1990 baseline can truly reflect the specifications of older properties at the time. For example, it was difficult to attain specific data in relation to the likely levels of loft insulation. In some areas the review highlighted a range of alternate assumptions which if utilised could affect the theoretical baseline, if the modelling was updated or repeated. Such issues are discussed in the annex and include minor changes to the baseline assumptions for examples D (1950 to 64) and example Group G and whether additional open chimneys should be specified in (example A to D). The debate over specifying open chimneys highlights the difficulty of pinpointing a theoretical baseline in 1990. In this instance the modeller could either enter the results as built ( e.g. open coal fires) or decide that open chimneys are likely to be sealed in a gas heated property with a flue.

It is also probable that some of the older property examples as built would have had less tank insulation than the baseline assumption. This issue was modelled separately, and it was found that it had neither a significant impact on the baseline or implications for strategies associated with meeting the SHQS and EESSH. Given this minor impact it deemed unnecessary to revise the modelling.

9.2 Representation of the social housing stock

The consultation charts a pathway through to 2020 and beyond toward 2050 climate change targets for 23 retrofit examples. These 23 examples represent a cross-section of the Scottish housing stock and are a useful reference point for social landlords. However, the Peer Review identified some gaps in the mix of examples versus the profile of the Scottish housing stock in terms of different age bands corresponding to building standards identified by RdSAP. The Scottish Government had noted issues of coverage when commissioning the Peer Review. To address this, a further twelve harder-to-treat properties have been provided which fit the profile of the Scottish social housing stock. These provide a good cross-section of harder-to-treat property types. Each was modelled with gas and electric heating. At this stage in the validation exercise the latest and most up-to-date version of RdSAP was available ( RdSAP 2009 (v9.91).

9.3 Remodelling and validation

Each of the 23 examples was first modelled using RdSAP 2009 (v9.90), the most up-to-date version available at the time. When reviewing the examples, the input assumptions were deemed valid. As noted above, for some retrofit examples it would be valid to consider alternate values for loft insulation, tank insulation and number of open chimneys for the baseline. Inputting alternate values alters the percentage improvement but does not alter the path to SHQS compliance (This is discussed further in the Report Annex A). On account of the limited data on loft insulation levels, it was felt reasonable to specify 100mm as per the SHQS minimum standard. In practice, any installs later in this period would be 250mm, to meet the minimum U-value in building standards. This again does not significantly change the path to achieving the SHQS or EESSH but does mean additional costs for top-up loft insulation, as opposed to a single installation.

9.4 Significance of software version

The remodelling resulted in some significant changes from the consultation document. As the original assumptions were deemed to be valid and were not altered, the variance is solely down to differences between RdSAP 2005 and RdSAP 2009 (v9.90). This was most pronounced in the electrically heated examples. For gas heated properties the variation was less pronounced but could be significant for some examples. In part, this is likely due to changes to the default boiler efficiencies in SAP. Where defaults are chosen, it is not anticipated that there will be significant variations between version 9.90 and 9.91. Care should be taken when comparing historic data from older versions of the software.

9.4.1 Utilising new RdSAP capabilities

The new version of RdSAP gives considerably more functionality and flexibility with the ability to override defaults and input user defined values. These capabilities were tested out on two examples: a Swedish timber house and a pre-1919 tenement. In the first case, the use of more property specific values rather than more generic defaults was beneficial, whilst for the latter this had a negative effect. It was noted, however, that user defined values can only be specified by a skilled assessor who can identify and evidence different specifications. In doing so, assessors should provide documentary evidence to justify the values chosen for audit purposes. The issue of evidence needs to be considered to ensure assessors can justify any in-situ U-value calculations. It will be important for social landlords to recognise this performance gap and differentiate between modelled and likely actual performance of improvement measures in relation to specific stock types and characteristics ( e.g. poorly performing solid floors).

When developing the additional examples, it was noted that a number of harder to treat property types ( e.g. system built and multi-blocks) did not meet the proposed ratings unless external solid wall insulation was included as a 'further' measure rather than noted as an 'advanced' measure (which is more applicable to the 2050 targets). New funding streams such as ECO should mean such measures will be affordable in this period, provided the specifications ensure its eligibility ( e.g. U-value of 0.3 at time of writing). In this respect, the new software has advantages in providing more defaults in relation to insulation thickness, including 150mm which achieves this standard.

9.5 Communal measures

It was found that some communal measures and some draught proofing measures are not recognised adequately (if at all) by RdSAP, and so any savings made by these measures will not be accurately reflected in the ratings attributed to the property in question. Landlords must be aware of this, and recognise that while such measures may not help their stock reach in a modelled sense , in reality they are likely to benefit their tenants. Meeting a statutory obligation is a key driver for investment decisions, and this could lead to landlords installing potentially less beneficial measures to achieve compliance - and conversely not installing potentially beneficial measures because they do not contribute to the scoring system in the standard. However as noted at 6.2, the new version of RdSAP 2009 (v9.91) enables more detailed treatment of the internal corridor wall of properties ( i.e. 'sheltered corridor' wall), in comparison to the previous RdSAP version (v9.90).

9.6 Feasibility and risks

The retrofit examples are intended to illustrate example routes to compliance for social landlords; they are not exhaustive either in property type or improvement measures. In most cases they use relatively simple building forms and so properties that vary from these will have different baseline performances and post-improvement impacts. Issues such as multi-tenure properties or planning restrictions on conservation-grade properties will make these harder-to-treat, and some of the common upgrade measures may not be feasible. Responsibility lies with individual landlords to identify variations and measures suitable for their own stock.

9.6.1 Solid Wall Insulation

For certain property types certain measures are likely to prove particularly complex to install. In particular, solid wall insulation where it cannot be applied externally for aesthetic or multi-tenure reasons and it cannot be applied internally for reasons of disruption or tenant refusal. Where it can be applied, subsidy in the form of ECO may not be universally available for basic measures and may only partially cover the high costs of measures such as internal wall insulation. Social landlords and the Scottish Government will need to work together to identify workable solutions to maximise levels of ECO, drawing on a limited pot of funding. A critical consideration is specifying external or internal wall insulation solutions that have a specified U-value of 0.3 (at time of writing), which equates to standards for CERO ( ECO) eligibility.

9.6.2 Off-gas properties

Properties off the gas network will have lower energy efficiency and environmental impact ratings, and this has been reflected in setting a standard by fuel type. For electric properties, EE ratings are less affected due to off peak tariffs which moderate running costs. However, electric storage heating will have a low EI rating due to higher carbon emissions. Fuel switching is likely to be important where it is an option either to gas, high efficiency oil boilers or heat pumps. In some areas, consideration of the latter options is required because in future, newer forms of electric storage heating could be matched to peaks in local renewable production energy before entering the main grid. Retaining storage heating could require more extensive fabric improvements to be considered on account of a low EI rating. Issues could arise where oil heating is the most cost effective way of boosting the EE rating or offers a better EI rating than electric storage. In the medium to long term, an electrically heated property's EI will improve as the grid is decarbonised. Meanwhile, low default efficiencies and higher default costs, than achieved in practice, may also reduce EE ratings for biomass systems. These issues will only be acute for a small number of properties but need to be considered by the Scottish Government on account of concerns expressed by some rural social landlords. More generally consultation responses indicated that the EE rating may be more of a focus for both landlords and tenants who are more concerned with fuel poverty.

9.6.3 Other cost and feasibility issues

In terms of feasibility, a number of key points were noted that could affect either projected impact or actual uptake of measures:

• Historic evidence shows limited application of some of the proposed improvement measures ( e.g. floor insulation, internal wall insulation).
• Significant barriers are likely to include multi-tenure issues, tenant refusal of disruptive works or changes of heating system, and in conservation areas, or in Listed Buildings granting of permissions for very visible measures such as external insulation or solar panels.
• Additional costs to cover issues such as tenant decants, staff time for negotiations and use of specialist systems for harder-to-treat properties are likely to be an issue for some landlords.
• It could be hard for some properties to meet at least one of the EE and EI ratings (for example, some electric-heated properties, or those heated by biomass with its limited default efficiency rating within RdSAP). Requiring all properties to meet both EE and EI standards could prove problematic.
• Some measures, in particular certain microgeneration technologies, are likely to require time and financial investment by landlords to ensure tenants are able to use them efficiently and realise the predicted savings.
• Legal issues could present barriers to uptake of some measures, e.g. solar panels on roofs in multiple ownership, enforcing multi-tenure retrofits and Right-To-Buy owners with no funds to contribute to improvements.
• For high-rise and system-built properties, it is critical that the Scottish Government specify external wall insulation as a 'further measure' to be included as a means to achieve the proposed ratings. This will be important in relation to fuel poverty targets and objectives as well as CO ₂ targets. In some cases, technical issues may be a barrier. Cost is also a critical factor but less so if sufficient ECO subsidy can be sourced.

9.7 Costs and benefits

Costs for the retrofit examples were found to be broadly representative; however, the property details and improvement measures will clearly vary in individual cases. Some of the microgeneration costs and applicability were queried, however these costs are subject to more variation over time and this is likely to continue with the advent of further finance mechanisms such as the RHI. For communal retrofit measures, sample costs show a considerable variation, depending on aspects such as the location of any communal plant room; this is useful evidence for social landlords.

The funding arena changes periodically and this presents challenges for social landlords - but new and recent finance schemes will be of particular importance for the EESSH. Many landlords are likely to base their retrofit strategies in large part on what measures receive funding support. However, the way the FIT reductions for PV were implemented in 2011-12 has led to a degree of wariness among social landlords, and recovering from this could take some time. New schemes such as the RHI could significantly affect uptake of renewable heat systems in social housing (if it is eligible), particularly in off-gas areas. The impact of the Green Deal in social housing remains to be seen, but early research suggests eligibility and uptake may be more limited than policy-makers anticipate. Aside from EWI and hard-to-treat cavity wall insulation projects, accessing ECO will be challenging outside the worst areas of deprivation or smaller rural settlements. The best opportunities will be for solid walled properties and hard-to-treat cavities ( HTTCs).

9.8 Final Summary

The assumptions in the consultation document are generally accurate and realistic. Only minor changes in approaches to modelling were identified and none were significant to warrant significant revisions in the modelled baselines or choice of retrofit measures. Timing and phasing of some measures such EWI are important if some properties are to meet the EESSH. Even for the more challenging properties, meeting the standard should not be prohibitively expensive providing ECO funding is available for external wall insulation.

Overall, the consultation retrofit examples and additional harder-to-treat examples address a wide selection of property types and show a path towards compliance. The examples fairly reflect both the limitations of the software and knowledge of the stock, particularly information on the historic baseline. Social landlords should recognise that these examples are a 'best fit' and their own properties may deviate from these examples. There will, however, always be a small example of properties where compliance is challenging due to local circumstances e.g. mixed tenure or historic properties. These will require specific strategies and allowances.